JPMorgan Predicts S&P 500 to Drop by 2024, Contrary to Wall Street Optimism

According to Yahoo News, JPMorgan Chase & Co. has released a pessimistic forecast for the S&P 500 Index, predicting it will drop to 4,200 by the end of 2024, which is approximately 8% from its current level. This outlook is in contrast to the majority of Wall Street strategists who are calling for all-time highs in US stocks in the coming year. JPMorgan's chief global equity strategist, Dubravko Lakos-Bujas, cites reasons such as global growth deceleration, shrinking household savings, and high geopolitical risks with national elections, including those in the US, potentially adding to policy volatility. The bank's outlook reiterates its stance from earlier this year, which has not materialized as US stocks are headed towards a double-digit annual gain amid economic resilience. Lakos-Bujas, along with his team, including chief market strategist Marko Kolanovic, wrote in a note to clients that they expect a more challenging macro backdrop for stocks next year without rapid Fed easing, as consumer trends soften and investor positioning and sentiment mostly reverse. JPMorgan's view differs significantly from other Wall Street predictions, with strategists such as Savita Subramanian at Bank of America Corp. and Binky Chadha at Deutsche Bank AG foreseeing the S&P 500 hitting 5,000 or higher next year. Even Morgan Stanley's Mike Wilson, a known equity bear, has turned more positive on equities, predicting the S&P 500 will close at 4,500. JPMorgan's call is the lowest among those tracked by Bloomberg, which currently average around 4,664. The S&P 500 has experienced a nearly 19% surge so far this year, driven by strong economic data, falling inflation, and the belief that Federal Reserve officials are nearing the end of their rate-hiking cycle. Recovering corporate profits and a boom in artificial intelligence that has boosted technology shares have also contributed to the positive sentiment across 2023.